Getting Better of the Way to Excellence*

The personnel turnover rate in the IAD ranges from 25% to 50% per year for the prior three years, as compared to the average turnover rate for the County as a whole of about 12%. Response: Do not concur The average turnover rate for the prior three years in the Internal Auditor series is 58.3%. In 2007/08 there were 4 filled Internal Auditor positions and 3 separations which equal a 75% turnover rate. In 2008/09 there were 5 filled positions and 2 separations which equal a 40% turnover rate. And in 2009/10 there were 5 filled positions and 3 separations which equal a 60% turnover rate. There currently are 6 positions in the Internal Auditor classification series in the Auditor/Controller's office. There are four allocations at the Internal Auditor IV level and two at the Internal Auditor III level. The County's turnover rate for all departments in 2009 was 7.34%. Year Resigned - Voluntary <b>Probationary Dismissal</b> 2007 2 0 2008 2 2 2009 2 0 2007 reasons for resignation included: 1- no comments, 1 resigned for better opportunity 2008 reasons for resignation included: 1- move to other company outside of Ventura County, 1 resigned to care for ill family member 2009 reasons for resignation included: 1 - no comments and 1 - leaving the area - thoroughly enjoyed working here, would return if possible. 2009-2010 Grand Jury Response

HR performs exit interviews of departing employees through the use of a form to be completed after the employee's last day of work and to be returned by mail. Response: Partially Concur Prior to 2007, every agency/department was responsible for conducting face to face exit interviews. Not all agencies/departments were performing this function consistently. The 2006/07 Grand Jury Report recommended that the County conduct exit interviews with all employees that voluntarily separate from employment through a mail in program. Their belief was that exiting employees were reluctant to provide meaningful comments regarding their employment experience and therefore the County was failing to collect relevant information. In December 2007, a new personnel policy was developed by the Director of Human Resources to address the Grand Jury's concerns. The new policy required the County's Agencies and Departments to provide all employees voluntarily separating from County service with a Separation Questionnaire that they could complete and return by mail to County Human Resources. In addition, the employees would be given a confidential envelope addressed to County Human Resources with a copy to their department if they so chose to do so. Additionally, in July 2010, the agencies/departments were instructed by County Human Resources to provide both a face-to-face exit interview and provide the employee with the mail-in separation questionnaire. This action was taken to ensure that departments consistently follow the policy regarding exit interviews and therefore capture vital information regarding recruitment, retention, compensation, training opportunities etc.

In reviewing mailed-in exit interviews of former internal auditors, HR has found nothing to indicate a possible problem with working conditions within the County or the A-C organization. Response: Partially Concur Prior to 2007, every agency/department was responsible for conducting face-to- face exit interviews. Not all agencies/departments were performing this function consistently. Beginning December 2007, with the new policy regarding separation questionnaires, there have been six Internal Auditor separations, of which three were voluntary resignations. County Human Resources did not receive any mail-in 2009-2010 Grand Jury Response separation forms for those resignations. However, all three of the employees that voluntarily resigned turned in a separation form to their department representative rather than mailing in the form. They all indicated that they were satisfied with on the job training, advancement opportunity, salary, benefits and supervision. Their reasons for resignation included the following: Leaving the area, "thoroughly enjoyed my service and would return"; "Other opportunities with a company outside the County"; and to provide care to ill family member. As vacancies occur within IAD, it is proposed that exit interviews be scheduled and conducted by CEO-HR to encourage and provide separating employees with an opportunity to share their experiences and impressions of the workplace.

Classification Specifications (similar to job descriptions) and salary ranges for A-C internal auditors were adopted in 2001. The salary ranges have been modified only for general "cost of living" increases negotiated between the County and the Service Employees International Union. Response: Partially Concur County Human Resources has conducted compensation surveys several times since 2001. They were completed in 2001, 2005, and 2007. The analysis conducted during each market survey concluded that the Internal Auditor classification series was less than 3 percent below market. The classification received general salary increases in the following increments: Date Percentage Increase August 9, 2009 1.5% November 1, 2008 .5% July 13, 2008 2.5% July 15, 2007 3% July 5, 2004 3% March 28, 2004 3% September 29, 2002 3%

In April 2010, the County of Santa Barbara advertised in the Ventura County Star for an Audit Supervisor with a rate range of $84,701 - $103,402, requiring a Certified Internal Auditor certificate, three years experience and one year lead work. Response: Partially Concur 2009-2010 Grand Jury Response Although the data provided in F-10 is correct, the Audit Supervisor classification is not comparable to existing Internal Audit classifications within the County of Ventura. The Audit Supervisor in the County of Santa Barbara has oversight and review responsibilities for ongoing audit fieldwork and reporting. The Audit Supervisor is also responsible to provide supervision, training, and quality control for, and oversees fieldwork of, Accountant-Auditors. The position requires possession of a Certified Public Accountant Certificate recognized by the American Institute of Certified Public Accountants, or possession of a Certified Internal Auditor Certificate and three years of professional experience in financial auditing, including at least one year of lead worker experience.

HR compares salaries with seven Southern California counties (excluding Los Angeles County) for determining competitiveness for County salaries. HR has conducted no comparable survey of private sector internal auditor salary and experience ranges. Response: Partially Concur For compensation surveys, the County typically compares itself to the Southern California counties. However, depending upon the classification, we may also utilize local cities and Northern California counties as well. The County does not typically utilize private sector survey information. There are published reports available for purchase but the components of the surveys typically do not include all compensation components that the County uses for comparison.

In its report Controls Self-Assessment Restart, the 2007-2008 Ventura County Grand Jury recommended: "R-02 The A-C and the Human Resources Director should jointly conduct a comprehensive study to resolve staffing, recruiting and retention issues in the Audit Department, and provide the results and recommendations to the CEO and the BOS." The CEO and the BOS combined response stated: "Do not concur: The Auditor-Controller's Office has six budgeted internal auditor positions... The recruitment opened 7/28/08. As of 9/02/08 they have 84 applicants...It is our office's opinion that the current salary and classification status of the internal auditor series is appropriate...lf they [Auditor-Controller] are unsuccessful in filling their vacancies at the end of this recruitment, we will 2009-2010 Grand Jury Response work with the A-C to determine what other alternatives should be considered." [Ref-05] Response: Do Not Concur County Human Resources has conducted two recruitments in the prior two years. The 2008 recruitment for Internal Auditor I-IV received 165 applications. Of those applicants, 67 met the minimum qualifications for the Internal Auditor position. The Auditor/Controller's department received 67 applicants for interviews of which they hired 3 applicants. One candidate was hired as an Internal Auditor II at bottom step of the range. A second candidate was hired as an Internal Auditor I at 5% above the bottom step of the range. And the third candidate was hired as an Internal Auditor III at 5% above mid-range. The 2009 recruitment for Internal Auditor I-IV received 126 applications. Of those applicants, 63 met the minimum qualifications for the Internal Auditor position. The Auditor/Controller's department received 27 applicants for interviews of which they hired 3 applicants: The first candidate was hired as an Internal Auditor II at the bottom step of the range. The second candidate was hired as an Internal Auditor II at the bottom step of the range. The third candidate was hired as an Internal Auditor I at the bottom step of the range. In regard to recruitment and retention, County Human Resources is able to attract and recruit qualified applicants; the salary ranges do not seem to be the problem. The current model favors hiring entry-level staff with the intention of training and promotion. Unfortunately, entry-level staff in general tends to have a higher rate of turnover. This is not necessarily due to any flaws in the work environment, but rather due to the human tendency to accept a new job and subsequently determine that auditing work is actually not what they want as a career. Choosing to underfill higher level auditor allocations with lower level staff also compounds the challenge of retaining qualified staff. Systemically, the County is able to offer advanced salary placement to candidates with exceptional skill levels, or during times when a limited pool of suitable candidates is available. Recruitment currently provides a large pool of candidates. Under the current hiring model, CEO HR has an agreement with Auditor Controller to recruit at the I,II,III, and IV level, placing all candidates on the same list. Future recruitments will require direction from the Auditor Controller as to her preference for hiring at the entry- 2009-2010 Grand Jury Response level or at the journey-level. CEO HR will then focus its efforts either on entry- level recruitment at the I and or II levels or journey-level (III/IV) in order to target groups within separate lists. Currently, it appears that entry-level positions are usually selected as new hires and III and IV level positions are generally filled through promotional opportunities. In the event that a journey-level (III or IV) needs to be recruited from outside the County, a recruitment focused on obtaining highly skilled professionals can be conducted. In general, CEO HR has made the decision to provide multi-tiered examination processes. Future recruitments for the Auditor Controller will include examination processes tailored to appropriate levels. This methodology will include the use of more objective processes such as written and structured oral examinations in addition to, or in lieu of, scored supplemental questionnaires.

Since the time of the CEO and BOS response to the 2007-2008 Grand Jury Report, the A-C and HR have not undertaken a study to resolve staffing, recruiting, and retention issues in the IAD. Response: Do Not Concur In the County Executive Office/Human Resources Department revised 9/3/08 response to Recommendation 02, Grand Jury Report, "Control Self Assessment" the following was provided: "The Human Resources Director in cooperation with the Auditor- Controller's Office conducted a joint study of the (compensation) issue. A total compensation salary study of governmental auditors consistent with those used in our Labor negotiations model was conducted. The study indicated that the County's internal auditor classification to be within approximately two percent of the market in terms (of) total salary and benefits. The study by the Human Resources Department of the internal auditor classification did not reveal the need for salary of classification adjustments because there do not appear to be any salary inequities or recruitment issues. Further, the most recent employment recruitment for the internal auditor series, Auditors I-III, ending March 2008, resulted in a total of 81 applicants, of which 64 were certified as eligible and referred to the A-C for interview. The A-C interviewed 50 candidates and hired four internal auditors. Three of the four successful candidates indicated a preferred salary on their employment application, ranging from $55,000 to $70,000, all within the established salary range. The A-C appointed two of the new hires at the entry level Internal Auditor 2009-2010 Grand Jury Response I with a base salary of approximately $42,000, and two new hires at the journey level Internal Auditor III with a base salary of approximately $58,000." Human Resources does not believe additional studies will impact the hiring and retention of Internal Auditors. There may be factors other than salary that are having an impact on hiring and retention. REPORT CONCLUSIONS Although responding to Conclusions was not requested by the Grand Jury, we believe it is important to address Conclusions C-02, C-04, C-05 and C-06. C-02 The IAD audit staff continues to lack overall audit experience and experience within the County. (F-02 through F-04) Response: Do Not Concur. See table below for experience levels. PCN Classification Date of Hire* <b>Total Years</b> Auditing Experience 00022742 Internal Auditor III 11/16/2005 4+ 00022743 Internal Auditor II 08/10/2008 2 00025573 Internal Auditor II 01/04/2009 1+ 00025574 Internal Auditor II 01/10/2010 3+ 00000229 Internal Auditor II 11/15/2009 9+ 00000228 Internal Auditor I 06/27/2010 <1 * Into IAD C-04 HR is losing the direct and less-structured insight of a face-to-face interview by conducting exit interview by mail. HR has lost input from an indeterminate number of former employees, all of which could provide useful insight into high-turnover situations. (F-06 through F-08) Response: Partially Concur (see responses for F-06 through F-08) C-05 Recruitment and retention of audit staff is suffering because HR and A-C have not updated auditor salary schedules to be competitive with those of other Southern California counties (F-02 through F-09, F-11) 2009-2010 Grand Jury Response Response: Do Not Concur (see response for F-06 through F-09 and F-11) C-06 HR has not conducted a comparison of the County auditor salary structure against that of private firms, which could be likely sources of significant competition (or of recruitment) for capable and experienced internal auditors. (F-11 through F-13) Response: Partially Concur (see responses F-11 through F-13) REPORT RECOMMENDATIONS